Oil prices declined on Tuesday during intraday trading over supply uncertainties ahead of the OPEC+ meeting on Sunday, when major oil producers are expected to decide whether to continue, reduce, or increase the current output cuts.
International benchmark crude Brent traded at $82.01 per barrel at 15.38 p.m. local time (1238 GMT), a 0.37% fall from the closing price of $82.32 a barrel in the previous trading session on Monday.
The American benchmark, West Texas Intermediate (WTI), traded at the same time at $77.50 per barrel, down 0.42% from Monday’s close of $77.83 per barrel.
With the OPEC+ producer bloc due to convene for a full ministerial conference on Sunday in Vienna to review policy for the year ahead, it is unclear when and how Riyadh and Moscow will roll back their voluntary reductions that are in addition to a 2 million bpd cut to the OPEC+ output ceiling.
Saudi Arabia has been voluntarily making cuts of 1 million barrels per day (bpd) since July and has decided to continue cutbacks until the end of December this year.
As a result of Western sanctions imposed following its war with Ukraine, Russia lowered its oil production by 500,000 barrels per day in April and its oil exports by 300,000 barrels per day in September.
Although Saudi Arabia desires a price floor of more than $80 per barrel, experts believe that, given the current drop in oil prices, further output cuts are possible.
“I fear I have very little choice but to take extra measures this weekend to ensure that prices stay above that crucial $80 per barrel that the vast majority of the group so desperately needs to balance fiscal budgets,” Matt Stanley, the Middle East Partnerships lead at analytics firm Kpler, said.
“I also think that the voluntary cuts of 1 million bpd that Saudi Arabia announced earlier this year will be officially extended for a length of time, too,” Stanley said.
By Sibel Morrow